Non-operating owner Danaos Corporation is hedging its bets on the next generation of boxships by investing in tonnage that can run on HFO or (with a small amount of conversion) future methanol fuel.
Danaos has ordered four 7,200 TEU container ships from Daehan Shipbuilding in South Korea. Mid-size hulls don’t get as much attention as the latest 24,000 TEU Megamaxes, but they will help fill an “underbuilt” market niche, according to Danaos.
The vessels will be “methanol fuel ready” and will come with open loop scrubbers to run on HFO. Scrubbers currently offer a significant economic benefit to the shipper. The fuel savings achievable by burning HFO instead of VLSFO are in the order of $200 per tonne (30%), based on prices in Rotterdam. The series will also be IMO Tier III and EEDI Phase III compliant, and the first vessels are expected to be delivered to Danaos in the first half of 2024.
“Current global developments point to significantly higher fuel prices in the future and given the uncertainty of green fuel availability, we are following a strategy of investing in the most fuel efficient vessels,” said Danaos CEO Dr. John Coustas in a statement.
Scrubbers will minimize the cost of fuel today, Coustas said, while ship design will retain the ability to modify ships for green methanol propulsion when sufficient supplies of this future fuel become available. Methanol is the green fuel of choice for Maersk’s future containership fleet, among others.
“This strategy removes the risk of technical obsolescence while providing short to medium term benefits on the fuel cost front. Additionally, the mid-size segment is the most underbuilt, and a replacement will be needed,” Coustas said.
Daehan’s selection may reflect the ultra-tight containership building niche market. The yard is not traditionally a builder of boxships: it has long specialized in medium-sized tankers, and it has just won the first order for container ships in its history in October 2021. However, the slots opened in large shipyards that build large boxships have effectively disappeared through 2023, booked in a recent frenzy of orders.
In January 2022, Daehan was acquired by Korean private equity firm KH Investment, the same company that bought STX Offshore last year.